This page contains a Flash digital edition of a book.
www.musicweek.com


06.08.11 Music Week 3


SOME LABELS PRAISE HISTORIC EMI ACQUISITION OUTCOME - OTHERS SLAM EC’S DECISION


Indies struggle to reach a Universal consensus


LABELS  BY TIM INGHAM


U


niversal’s £1.2bn buyout of EMI split the independent label


community down the middle before the deal was approved – and little has changed in its wake. Despite opponents of the


acquisition celebrating the “swingeing” concessions faced by UMG, including the sell-off of Parlophone, others in the sector have celebrated “a fair result”. Some in the independent


sector are thought to be interested in purchasing divestments from the deal: PIAS is understood to be considering an offer for Co-Op, whilst Mute is believed to be keen to buy back assets sold to EMI in 2002. Meanwhile, Domino and Ministry Of Sound have also been named as potential bidders for divestments, alongside BMG, Sony and Warner.


The Universal’s here, and we’re off: Blur, currently signed to Parlophone, will be signed to a new parent company soon


“It’s anybody’s guess as to who will end up with the assets”MIKE BATT, DRAMATICO


One serious concern from the


indies surrounding the deal has revolved around the power UMG will have in negotiations with digital platforms in future. As a result, EC regulators


pushed UMG into committing to banishing Most Favoured Nation clauses from contracts with digital music companies in Europe for the next ten years. MFN clauses would oblige


digital customers to extend any favourable term granted to Universal’s competitors to Universal itself. The EC also ruled that buyers


of divested assets must be operating in the music industry - although fears exist that financial companies could partner with or invest through labels and publishers in order to acquire.


REACTION SENIOR EXECS ACROSS THE UK INDIE SECTOR SPEAK TO MUSIC WEEK ABOUT DEAL


Korda Marshall, Founder, Infectious “I’m pleased that there’s now closure for the EMI staff and the artists concerned, and that the European Commission has forced these


divestments from Universal. The structure of what they’ve asked them to sell off has been positive. I’m torn between whether it’s better that Universal gets bigger, fatter and uglier so that it’s easier for the independents - and the worry that their increased market share will work in their favour. I hope that the Most Favoured Nation clause is policed by the EC and has teeth. That said, congratulations to Lucian for finally fulfilling his dream.”


PETER STACK, MD, UNION SQUARE MUSIC “It’s good for the industry to begin to see certainty around this deal. I believe EMI is better off with Universal than with venture capitalists. The


divestments and consolidation process will create a lot of opportunities. Union Square, as the leading independent catalogue marketing company, are keen and very well placed to participate in those opportunities.”


MARTIN MILLS, CHAIRMAN, BEGGARS GROUP “It’s good to see that the Commission has seen this deal as such a threat to the market that it has demanded and received truly swingeing


commitments on divestments. “However, that should not conceal the


fact that Universal’s arrogance has paid off for them, that they have destroyed a significant competitor, and that even with these divestments their ability to dominate and control the market has reached even more unacceptable levels. “Anyone trying to start a new digital


service will be realising that very soon, and we will continue to look to the regulators to monitor ongoing behaviour.”


LOHAN PRESENCER, CEO, MINISTRY OF SOUND “Anything which involves stability and certainty in the music business is a good thing. EMI has been adrift for a decade, hitting morale,


artist relationships and its ability to do deals. Whatever you think of the Universal deal at least there’s now clarity. Furthermore the concessions process was


protracted and in some respects clearly painful for Universal. “Overall it seems a fair result. We should


now move forward as an industry and deal with issues of common concern.”


MARTIN GOLDSCHMIDT, MD, COOKING VINYL “I’m gobsmacked. Everyone in the industry knows about Universal’s market dominance. The Sony/BMG decision was a farce, but this is a


disgrace. I guess that’s what a 50 million annual lobbying budget gets Vivendi.”


SIMON WILLS, director, ABSOLUTE MARKETING & DISTRIBUTION “We were very pleased to hear the announcement on Friday and well done to all the people who have worked hard to get to this position.


“The job is not over yet though, we need


to make sure that the divestments don’t all get swallowed up by large VCs and that the true independent sector get a chance to be involved.”


MIKE BATT, Founder, DRAMATICO “If this means venture capitalists hoover up the divested assets, it could be a disaster. If a BMG get it all, en bloc, that would make a


fourth major – I have no problem with that. The trouble is, at this stage, it’s anybody’s guess as to who will end up with the assets and I just hope it’s music people rather than city wannabees.”


ALISON WENHAM, CEO, AIM “Universal are being forced to sell the crown jewels of EMI following their misjudged attempt to persuade the EC that there would be no


competition concerns. We congratulate the EC on a very diligent and thorough investigation, and now urge it to continue to oversee the divestment programme, to ensure competition is preserved in the music industry for the benefit of artists and consumers, independents and digital companies. We want to see the independent sector strengthened, not weakened by the divestments and will continue to actively campaign to ensure this happens.”


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68